Its widely recognized that IT offers tremendous opportunities for economic growth, improve the efficiency of all processes involved, provide government agencies and its extended end-user community total cost of ownership advantages and superior value added services, while at the same can provide leading-edge decision support capabilities that improve services, revenue collection, and deterrence of fraud, corruptions, and criminal finance.

The case study presented is structured around well defined business challenges related to day-to-day operation of governmental agencies (G2G) and interaction between governmental agencies and trade community (G2C & G2B).

The key business challenges of the case study can be summarized as follows:

• Governments need to compete for foreign investments by differentiating their supply chain services and implementation of regional initiatives and global agreements.
• Customs revenue and tax collections represent substantial or primary components of government's entire revenue base. How can the customs increase revenue and contribution to national objectives? How can customs authorities develop and maintain a consistent, yet flexible policy and procedures to combat fraud, and corruptions
• Decision making is becoming increasingly difficult and information intensive
• Private Sector is demanding reform

Real Time Scenario

Supply chain involves materials, information, and finances as they move in a process from supplier to manufacturer to wholesaler to retailer to consumer. And in the whole process, the Customs Clearance procedures play an important role for faster trade. MicroClear is the 'glue' to supply chain players. Supplier needs to make sure that the goods reach the consumer on time. There are cases where the Customs clearance process brings in a delay to the whole process in supply chain. The traders often get tired of the time consuming procedures for customs clearance and demand change/improvement. Customs clearance procedures become crucial for "Just-in-time" or JIT industries where supplies are delivered to the production site as needed, rather than being stockpiled in a warehouse. Such supplier needs to make sure that the goods arrive at the production site on time which if they fail affects the production directly. Supply disruptions give retailers expecting weaker sales, a reason to cancel orders. Tackling these situations has become a challenge in these times of increased security measures and major delays at seaports and boarder crossings.

Since trade involves coordinating and integrating these flows both within and among companies and organizations like the customs department, a solution for successful trade would be a sophisticated software system with Web-based application service like MicroClear that will be a better linkage among all these players. The move towards electronic interchange of data through MicroClear will streamline the entire process of customs clearance. Round the clock availability of the services in MicroClear allows Customs and the trade community to track shipments anytime, anywhere. MicroClear will remodel the role of supply chain facilitating better trade.

MicroClear

MicroClear revolutionizes the process of customs clearance for the trading and customs community alike as all customs processes and transactions are accessible via secured and encrypted internet access. These capabilities extend the services of MicroClear anyone who has access to the Internet, thereby resulting in a much broader user base as no special software or hardware, other than a standard internet connection, is required to access and consummate transactions and other customer service processes. MicroClear allows companies to process almost all of their paperwork online, eliminating the old physical system and providing greater efficiencies and customer service. Furthermore, given MicroClear's XML and BizTalk-based capabilities, most data exchanges such as the exchange of electronic shipping documents and data from legacy systems will be tremendously facilitated, thereby improving efficiency while preserving the value of investments in legacy systems. Given MicroClear's underlying architecture, Mobile Telephones and other hand held devices will be seamlessly integrated with customs and CRM process (ex., transit systems, etc.).

All aspects of the MicroClear solution will be consistent with global e-government initiatives as well as existing and emerging EDI and XML-based EDI protocols. The MicroClear solution is "future proofed" in this regard as it leverages the core capabilities of Microsoft's BizTalk Server Platform to simplify communications and interfaces with all system end-users, intermediaries, and stake holders, thereby offering profound efficiencies to a business environment that has historically been characterized by high volume paper based process. The ability to convert paper-based documentation to electronic protocols and standards in accordance with emerging WCO conventions and schemas, is an inherent advantage of our XML and BizTalk-based technologies.

Given the complexity of the decision-making at the customs officer level, the need for advanced decision support systems is imperative. Decisions made by customs officers have ramifications for national revenue collection, law enforcement, and public health related issues. For example, when trying to verify the valuation of an import of tires from a South American country to the USA, World Trade Organization (WTO) and World Customs Organization (WCO) regulations require the customs official to have knowledge of transaction values for that particular commodity and country. This sort of information is not usually available to customs officers, as it requires specialized expertise in addition to a global price research infrastructure.

To make matters even more complicated, a lack of information can often force customs officers to make either arbitrary decisions that are unfair to the trading community, or alternatively, decisions that lead to lost revenue opportunities. Many countries depend on customs revenues as a substantial contributor to national revenues and many nations are concerned by what are ostensibly valuation related issues as follows:

• Impact of dumping on local industries, and,
• Lost income tax collections that are precipitated by over and/or under valuation of imports and exports respectively, and,
• Deterring criminal financial activity such as money laundering and other issues that are considered to be relevant to national security.

Clearly, in order to address these needs, MicroClear needed to feature at its advanced decision support technologies would be needed to ensure proper revenue and tax collection, the protection of national industries, fairness to the trading community, while serving as a deterrence for criminal financial activity. To this end, it was decided to integrate, as optional modules, two decision support technologies developed by Inspection & Control Services Co (ICS). These technologies help customs and revenue officials to filter the plethora of data so that resources can be allocated to "risky" cases where the ratio of the cost (of resources) to benefit (however defined) is the greatest. These technologies also add substantial capabilities to risk management and selectivity modules, as the PAW database can be compared intelligently to broader information sets, as would be the case in traditional warehouse management (WMS) applications. For instance, an importer may have declared a container has 1200 boxes of VCR's of a certain brand. By referencing the database that contains products weights and packing cubes, it would be easy to determine if there is a possible volume, weight, or valuation discrepancy that would in turn lead to a more detailed price and physical verification.

Once a declaration is selected for more detailed scrutiny, a more detailed decision support technology is employed. The ICS Article VII Price Research System is web-based online workflow engine that intelligently coordinates the activities of a global price research and intelligence gathering infrastructure. The ICS Article VII Price Research system also employs advanced web-based workflow and SQL 7 database technology. This technology provides customs and law enforcement officials the ability to collect pricing intelligence in accordance with the WTO's GATV Agreement Article VII, a legal requirement of all members of GATT. From a universe of a thousand declarations, perhaps as many as 50 are ultimately selected for more detailed price and physical verification. Using the ICS Article VII Price Research System, customs and other government officials get direct access to seasoned price research analysts throughout the world. Once an inquiry is requested, the results of the price research request are transmitted back through the Internet.

Clearly, this capability provides global decision-making capabilities (i.e. an "electronic" customs officer in every country around the world") to customs, revenue, and law enforcement officials. As such, MicroClear features a configurable multi-tiered Risk Management System (RMS) at its core that will facilitate the optimization of high and low level customs processes, risks, and resources. This module is part of MicroClear suite and will be customizable based on the particular risk management procedures, criteria and strategies adopted by the host country. As such it will probably be one of the most important decision support features of the solution. By providing such systems, the host country should achieve the following benefits:

• Conformance to high level objectives and decisions (ex. total inspection rate should be between 10% - 15% of all imports).
• The ability to focus and allocate costly assets and resources (ex. scanning systems, price research) to declarations and imports that are likely to yield the greatest returns (ex. improve customs or tax yields, deter drug smuggling, etc.).
• Improve effectiveness as measured in terms of revenues collection or enforcement targets.
• Trade facilitation and streamlining (ex. making the clearance supply chain more efficient for the business community).

MicroClear's RMS will function as a standalone module/that enables and facilitates the establishment of high level rules and objectives that are then implemented via workflow by customs officers and officials. The RMS also takes into consideration the requirements of an ever increasing set of pre-declaration data that can be used for risk management purposes such as EDI and information coming from logistics and transportation intermediaries, historical valuation databases, information shared and received from external third party customs agencies, external providers of price research information, etc. The pre-declaration data can then be used to screen incoming declarations to improve risk management functionality before, during, and after arrival of the physical shipments. The RMS module features a multi-dimensional incremental approach to risk management that facilitates additional levels of investigation, research, and resource allocation after risks have been more narrowly defined, thereby optimizing resource allocation. Furthermore, historical track record and black list management, with the ability to share and exchange such data with other government and entities will be part in parcel of the RMS module. Finally, the RMS system interfaces with automated inspection technologies and systems that are expected to become increasingly prevalent, sophisticated, and knowledge-based in years to come.

According to Allan Robinson, ICS's Chief Executive Officer, ".before standardizing on Microsoft, we conducted an exhaustive review of all available technologies. No other platform provided comparable total cost of ownership (TCO) or technological comprehensiveness. We were able to "future proof" our technology. Furthermore, Windows Data Center and Clustering Technologies guarantee scalability, 24X7 robustness, and fault tolerance. We also wanted to ensure that MicroClear supported emerging e-payment, security and communication protocols (ex. XML), given the importance of the e-commerce vision to our clients' emerging e-government initiatives. Finally, we needed to ensure security from the bottom-up. MicroClear uses inherent Microsoft security protocols as well as separate firewall controlled "demilitarized zones" for internal customs users and external users. Due to leading-edge encryption technologies, validation, certification protocols as well as the inherent architecture of the solution that maintains the integrity of the underlying data, confidentiality and security related objectives are tailored to the requirements of our clients."